1. (SBU) Members of PhRMA's (Pharmaceutical Researchers and
Manufacturers of America) Latin American task force, on a two-day
visit to Argentina to meet with GoA officials, local affiliates, and
pharmaceutical chambers, remain concerned about inadequate data
protection for new pharmaceutical products and the lack of linkage
between patents and market access. However, they praised
improvements in patent processing, and said that judicial
injunctions in patent cases were not too difficult to obtain.
Separately, the new GoA Science Minister expressed to Ambassador his
interest in increasing pharmaceutical company research and
development activity in Argentina, and acknowledged that an improved
patent regime could facilitate that goal. End Summary.

2. (SBU) PhRMA task force members (Will Stephens, Johnson and
Johnson VP of International Government Affairs; David Talbot, Eli
Lilly Director of International Government Affairs; Nina DeLorenzo,
Schering-Plough Senior Manager of International Public Affairs; and
Andrew Rudman, PhRMA Assistant VP for Latin America) met March 4
with Ambassador. They had just completed a two-day country visit,
during which they met with the Patent Commissioner of
(USPTO-equivalent) INPI, local representatives of the International
Judicial Academy, and the economic advisor to the EU Mission who
covers intellectual property issues. They were accompanied by
Argentina country managers from Pfizer and Janssen-Cilag (Johnson
and Johnson's local subsidiary).

3. (SBU) DeLorenzo noted that non-existent data protection for new
pharmaceutical products and the lack of linkage between patents and
market access allow the GoA's FDA-equivalent to approve sales of
patent-violating products. This, she said, remains the most
important issue for Schering-Plough in Argentina. Rodrigo San
Martin, Country Manager of Pfizer, echoed that concern. However,
Stephens praised INPI for its improvements in recent years on patent
processing, and said judicial injunctions in patent cases were not
too difficult to obtain, despite the process being "slower than we
would like." Overall, he said, the group was positively impressed
by Argentina's IP progress. When Ambassador asked for examples of
countries in the region who could serve as IP exemplars, Rudman
opined that Peru was one, especially in terms of efforts to
encourage innovation. He called Chile an example of what not to do,
and stated that the GoC was making very little effort to adhere to
TRIPS-plus IP standards negotiated in the USG/GoC bilateral FTA.
Stephens called Mexico a "leading case" in the areas of pricing
reforms, engagement on ways to increase innovation, and dialogue
with the pharmaceutical industry, and an example that Argentina
should seek to emulate.

4. (SBU) Ambassador noted that he met with new Science, Technology,
and Innovation Minister Lino Baranao, who told him that he wanted to
see more primary research conducted in Argentina. Ambassador told
Baranao that better patent protection would probably facilitate that
goal, and the Minister agreed. (The Ministry was created last
December by President Cristina Fernandez de Kirchner.) Stephens
said that the pharmaceutical industry's increasing production of
complex, new-generation biological products requires that IP patent
regimes worldwide modernize their legal and regulatory frameworks to
reflect that greater complexity. Ambassador noted Baranao had
raised the same issue, and has said that he wanted to make an effort
to ensure that Argentina's patent regime is appropriately updated.

5. (SBU) Ambassador suggested that the local pharmaceutical chamber
CAEMe present an "innovation package" of proposals to Minister
Baranao on how the GoA can best spur new pharmaceutical company
investment in R&D in Argentina. President Cristina Fernandez de
Kirchner has made attracting new investment a central theme of her
tenure, Ambassador noted, and being able to tie specific changes in
the IPR regime to increased investment might make a compelling
argument, with Baranao and Economy Minister Lousteau as potential
allies. CAEMe Executive Director Ernesto Felicio noted that a
number of local pharmaceutical firms who are not members of CAEMe
are conducting research here and could be allies in addressing IP
patent regime deficiencies. (On the other hand, all PhRMA members
doing business in Argentina are members of CAEMe.)

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COMMENT
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6. (SBU) PhRMA's positive outlook on pharmaceutical IP protection in
Argentina stood in stark contrast to the Embassy's previous meetings
with industry reps, including an April 2007 round-table for local
country managers (Reftel). During that meeting, company reps listed
flaws in Argentina's patent protection system including the slow
issuance of patents, the lack of linkage between the GoA entity
approving patents and Health Ministry approval to market generic
copies, and a weak legal process to fight patent infringement.
Interestingly, Talbot did not take issue with Stephens' optimism on
preventing patent infringement via injunctions, even though Lilly's
local country manager had highlighted exactly that issue as a major
concern in a November 2007 meeting with the Ambassador.

7. (SBU) The apparent disconnect is likely due to differing
perspectives of the local branches and home offices of the
companies. The local branches face the difficulties of the
Argentine IPR regime daily, whereas from the bottom line perspective
of headquarters, Argentina is an increasingly profitable place to do
business. Product sales are growing here - pharmaceutical sales, of
which approximately 50% are by research-based firms belonging to
CAEMe, reached $2.6 billion in 2006, double that of 2002, and
pharmaceutical consultant IMS Health predicts they will grow 29% to
$3.4 billion by 2008 - and clinical trials run by pharmaceutical
companies also continue to grow rapidly, with CAEMe estimating that
its members, which include many PhRMA firms, spent USD 92 million on
such research in Argentina in 2007, a 39.5% increase from 2006.

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